Frazer v. U.S.

Decision Date30 April 2002
Docket NumberNo. 01-5118.,01-5118.
Citation288 F.3d 1347
PartiesI.K. FRAZER, Margie P. Berger, Peggy Cothren Jasso, Michael P. Dear, Stewart M. Kenderdine, Edwin Gaston, Jr. and Janice Colley, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
CourtU.S. Court of Appeals — Federal Circuit

Dennis M. Hart, Butera & Andrews, of Washington, DC, argued for plaintiffs-appellants. With him on the brief was James J. Butera.

Brian Mizoguchi, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Stuart E. Schiffer, Deputy Assistant Attorney General; David M Cohen, Director; Jeanne E. Davidson, Deputy Director; and Elizabeth M. Hosford, Trial Attorney.

Before MAYER, Chief Judge, RADER, and GAJARSA, Circuit Judges.

GAJARSA, Circuit Judge.

This is a Winstar-related case. The appellants (collectively "Frazer") seek review of a final decision by the United States Court of Federal Claims dismissing their complaint for lack of subject matter jurisdiction because they failed to file the complaint within the six-year statute of limitations codified at 28 U.S.C. § 2501. On appeal, the appellants concede that the complaint was not filed within the six-year limitations period, but contend that equitable considerations preclude its dismissal. Because the facts of this case fail to support the appellants' claim to an equitable exception to the jurisdictional bar imposed by § 2501, we affirm.

BACKGROUND

As with the other Winstar-related cases, the appellants seek to assert claims against the government stemming from the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), Pub.L. 101-73, 103 Stat. 183, and its implementing regulations. Congress enacted FIRREA in response to the savings and loan crisis of the early 1980s. The circumstances surrounding this crisis in the thrift industry are by now familiar; as they are well-documented elsewhere, we do not revisit them here. See United States v. Winstar Corp., 518 U.S. 839, 843-58, 116 S.Ct. 2432, 2439-47, 135 L.Ed.2d 964 (1996); Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374, 1376-78 (Fed.Cir.2001). We present only those facts pertinent to the present appeal.

The appellants are former shareholders and directors of a now-defunct thrift, Superior Federal Savings Bank ("Superior"), who seek to assert a derivative action on Superior's behalf. In 1982, two savings and loan associations merged to form Superior. Before doing so, they informed the Federal Home Loan Bank Board ("Bank Board") of their intention to merge, with the understanding that they would employ a "purchase method" of accounting in order to comply with then-existing regulatory capital requirements. This purchase method permitted them to include goodwill as part of their capital account, and to amortize it over a forty-year period. The Bank Board approved the proposed merger. This approval resulted in the alleged Winstar contract. Consistently with the terms of the alleged contract, Superior recorded approximately ten million dollars of goodwill and planned to amortize it annually over a projected forty-year period.

Subsequently, in 1989 Congress enacted FIRREA. It implemented new capital requirements by, among other things, prohibiting thrifts from treating goodwill as an asset. Without the ability to count goodwill, Superior was unable to comply with the minimum capital maintenance requirements imposed by FIRREA. Superior became insolvent. On August 10, 1990, the Resolution Trust Corporation ("RTC") placed Superior into receivership for failure to meet FIRREA's requirements.

On February 21, 1990, approximately six months before federal regulators seized Superior, the thrift brought an action in the United States District Court for the Eastern District of Texas seeking to enjoin enforcement of the new capital requirements. This action alleged, among other things, the Winstar claims the appellants sought to assert before the Court of Federal Claims, viz. that the enactment and enforcement of FIRREA effected a breach of contract and a Fifth Amendment taking.

One month after the RTC took over as receiver for Superior, the RTC moved to intervene in the district court suit and to substitute itself as the plaintiff. The RTC simultaneously moved to dismiss the complaint. The district court granted RTC's motions on September 24, 1990, dismissing the complaint with prejudice. The appellants apparently did nothing to oppose the RTC's intervention and substitution as plaintiff, or the requested dismissal with prejudice.

More than six years elapsed before the appellants initiated the suit presently on appeal. They initiated this derivative suit in the Court of Federal Claims seeking to assert Superior's Winstar claims, on November 12, 1996. In the interim period between the enactment of FIRREA and dismissal with prejudice of Superior's district court suit, and the initiation of the present suit in the Court of Federal Claims, several events took place.

First, the FDIC negotiated two tolling agreements with the Department of Justice. The tolling agreements applied to Winstar-related cases in which the FDIC was the receiver for thrifts that failed due to the FIRREA's prohibition against counting goodwill as an asset. These agreements extended the statute of limitations until the Winstar matter had been finalized.

Second, on July 1, 1996, the Supreme Court issued its opinion in Winstar. See United States v. Winstar Corp., 518 U.S. 839, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996). In Winstar, the Supreme Court affirmed the en banc determination of this court that by enacting and enforcing FIRREA, the government breached contracts with the thrifts at issue in that case. Id. at 859-60, 116 S.Ct. at 2447.

Third, on October 30, 1996, the appellants sent the FDIC a letter, demanding that it "reinstitute the cause of action against the United States for breach of contract and/or an uncompensated taking." The FDIC neither directly responded to the appellants' letter, nor filed suit.

After the appellants filed the present suit on November 12, 1996, the government moved to dismiss the complaint as barred by the statute of limitations. The Court of Federal Claims rejected the appellants' numerous arguments that the statute of limitations should be inapplicable in this case, and granted the government's motion. Frazer v. United States, 49 Fed. Cl. 734, 735 (2001).

The court reasoned that 28 U.S.C. § 2501 required the appellants to file suit within six years of the time their claim accrued. Id. at 735. The appellants' derivative claims accrued, at the latest, on February 21, 1990, when Superior asserted those claims in district court. Id. Even on that late date the appellants would have had to file the present suit no later than February 20, 1996. Because they failed to file their complaint in the Court of Federal Claims until November 12, 1996, the court determined that the appellants' suit was "out of time." Id. The court rejected their argument for "equitable relation-back" to the filing date of the district court suit because that suit was no longer pending. Id. at 736. The court also rejected the argument that the government must be equitably estopped from asserting the statute of limitations defense because the appellants failed to demonstrate misleading governmental conduct on which they relied to their detriment. Id. at 737. The court then concluded that because the appellants' complaint was barred by the statute of limitations, it was beyond the court's subject matter jurisdiction. Id. at 737-38 (citing Chandler v. United States, No. 00-5125, 2001 WL 338141, at *2 (Fed.Cir. Apr. 3, 2001)).

Before this court, the appellants challenge the Court of Federal Claims' dismissal of their complaint. We possess jurisdiction over the appeal pursuant to 28 U.S.C. § 1295(a)(3).

STANDARD OF REVIEW

This court reviews de novo all legal determinations, including a dismissal by the Court of Federal Claims for lack of jurisdiction. Burnside-Ott Aviation Training Ctr., Inc. v. United States, 985 F.2d 1574, 1579 (Fed.Cir.1993); Dehne v. United States, 970 F.2d 890, 892 (Fed.Cir. 1992). Whether equitable principles can constitute a cognizable defense to the statute of limitations codified at § 2501 is a question of law. See Brice v. Sec'y of Health and Human Servs., 240 F.3d 1367, 1370 (Fed.Cir.2001) ("Whether equitable tolling is permitted under the Vaccine Act is a question of law which we review de novo.").

In contrast, whether equitable relief is warranted on the circumstances of a particular case involves factual determinations, such as the presence or absence of detrimental reliance, which are entitled to deference. See RHI Holdings, Inc. v. United States, 142 F.3d 1459, 1462 n. 3 (noting that if the court determined that the limitations period codified at 26 U.S.C. § 6532(a) contained an implied equitable exception, "then we would have to remand this case to the Court of Federal Claims for further factual determinations...."); cf. Decker & Co. v. West, 76 F.3d 1573, 1579-80 (Fed.Cir.1996) (holding that proof of detrimental reliance was necessary to avoid a time bar for failure to satisfy the 90 day limitations period codified at 41 U.S.C. § 606, but declining to remand for fact finding regarding detrimental reliance because, even if the claim were not time barred, it would fail on the merits). We review such factual determinations for clear error. Wyatt v. United States, 271 F.3d 1090, 1096 (Fed.Cir.2001).

DISCUSSION

The statute of limitations applicable to suits in the Court of Federal Claims provides, in pertinent part:

Every claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues.

28 U.S.C. § 2501 (2000).

The appellants concede — as they must — that they failed...

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